FTC Sues Intel for Anti-Competitive Practices

Share

FTC Sues Intel for Anti-Competitive Practices

Intel, whose processing chips power the vast majority of personal computers, "waged a systematic campaign" to prevent other chip makers from gaining traction, the Federal Trade Commission said Wednesday. The agency announced it is suing Intel for anti-competitive practices and for forming an illegal monopoly that drove up prices and hurt quality.

The FTC filed the lawsuit after a year-long investigation into the chip manufacture's market dominance over the past decade, concluding that Intel deprived consumers of choice and forced them to pay more for laptops, desktops and other devices by deliberately stifling competition – even when the competition offered superior products.

"Intel has engaged in a deliberate campaign to hamstring competitive threats to its monopoly," said FTC Bureau of Competition director Richard A. Feinstein in a statement. "It's been running roughshod over the principles of fair play and the laws protecting competition on the merits. The Commission’s action today seeks to remedy the damage that Intel has done to competition, innovation, and, ultimately, the American consumer."

The chip maker's latest infraction, according to the FTC, involved "smothering" competition to its computer processing units (CPUs) from Nvidia's graphics processing units (GPUs) by "mis[leading] and deceiv[ing] potential competitors in order to protect its monopoly."

Before that, the FTC claims, Intel threatened Dell, IBM, HP and other computer manufacturers, forcing them to choose Intel's chips over those of the competition.

The FTC also says Intel misled computers manufacturers and consumers into thinking that its chips were faster than those of the competition. It alleges that Intel secretly redesigned its compiler software and failed to disclose that its chips only appeared faster in tests due to the differences in the compiler, as opposed to its hardware actually performing at a higher level.

So, what does the FTC want Intel to do in order to make up for an alleged decade of abuse of customers, computer manufacturers and competing chip manufacturers? Basically, it just wants Intel to stop.

The FTC lawsuit seeks an order to "prevent Intel from using threats, bundled prices, or other offers to encourage exclusive deals, hamper competition, or unfairly manipulate the prices of its CPU or GPU chips." The organization might also pursue an order that would bar Intel from "excluding or inhibiting" the sale of competing chips and making or distributing anything that "impairs[] the performance – or apparent performance – of non-Intel [chips]."

This FTC action follows a lawsuit from NY Attorney General Andrew Cuomo, who sued Intel for bribing PC makers last month. In addition, Intel had to pony up a $1.5 billion fine in May to the European Union for undermining rival chipmaker AMD and paid AMD another $1.25 billion last month to settle the company's own lawsuits against Intel.